CR 04 09-Lessees of Safe Deposit Boxes

CR 04 09–LESSEES OF SAFE DEPOSIT BOXES

(July 2019)

INTRODUCTION

Businesses that regularly store securities and/or other property in safe deposit boxes can use this endorsement. However, it is important to point out that it does not cover money that might be stored inside the safe deposit boxes.

This analysis is of the 08 13 edition. Changes from the 08 07 edition are in bold print. It does not address changes in format that do not affect coverage.

ELIGIBILITY

This endorsement can be added to the Insurance Services Office (ISO) Commercial Crime Coverage Form or Policy.

SCHEDULE

The endorsement schedule has spaces to enter the name of the depository and the address of its premises. It also has spaces to enter the limit of insurance per occurrence and the amount of deductible per occurrence for either or both of the coverages the two insuring agreements provide.

ANALYSIS

This is an endorsement to the ISO Commercial Crime Coverage Forms and Policies and is subject to their conditions, definitions, and exclusions. The only changes are those within this endorsement.

A. Insuring Agreement

This optional insuring agreement has two parts:

1. Securities are covered for loss or damage because of theft, disappearance, or destruction. Coverage applies while the securities are in a safe deposit box inside the depository’s premises. Because items must be removed and deposited from time to time, coverage also applies when the securities are outside the safe deposit box on a temporary basis in order to remove or deposit them. However, coverage ends if the items or box leave the depository premises.

2. Other property that is NOT MONEY or securities is covered for loss of or damage because of attempted or actual robbery, burglary, or vandalism. Because items must be removed and deposited from time to time, coverage also applies when the other property is outside the safe deposit box on a temporary basis in order to remove or deposit them.

However, coverage ends if the items or box leave the depository premises.

Note: There is no coverage for money. In addition, coverage applies only at the named depository and the locations that have an address on the endorsement schedule.

 

Example: The Greco Restaurant has a large safe deposit box. It includes securities valued at $50,000, restaurant memorabilia worth $50,000, and $5,000 in currency. The owner visits the depository to review the box’s contents and finds it empty. There are no visible signs of forced entry on or about the box or the vault. Coverage applies for the stolen securities. There is no coverage for the memorabilia because there is no evidence of forced entry. The money is not covered because this endorsement does not cover money.

D. Exclusions

1. The exclusion for Acts of Employees, Manager, Directors, Trustees, or Representatives is amended to reflect that the depository is not considered to be the named insured’s authorized representative. This change results in coverage applying when the depository causes the loss.

 

Example: Karina and Karina Medical Partnership has a safe deposit box at Mutual Bonding Trust Depository. A Mutual employee works with outside individuals to gain access to a number of safe deposit boxes, including Karina and Karina’s. There is coverage because the partnership’s coverage included CR 04 09, listed Mutual and its location address, and the depository is not considered Karina and Karina’s authorized representative.

 

2. Five exclusions are added.

Coverage does not apply to the following:

a. Loss that results from surrendering or giving property in any purchase or exchange

b. Other property is not covered for any loss or damage resulting from a fire.

c. Loss of or damage to property that the depository owns, holds as collateral, or holds in trust for more than 30 days

d. Loss of or damage to property given away to someone outside the premises or financial institution premises (was banking premises in the 08 07 edition) because of unauthorized instructions or various types of threats.

The threat could be to take any of the following or similar actions:

·         Bodily harm to a person

·         Damage any property

·         Place a denial of service attack into any computer system (was “the named insured’s” in the 08 07 edition)

·         Place any type of malicious instruction, such as a virus, into any computer system in order to destroy, (was “the named insured’s” in the 08 07 edition) damage, or corrupt computer programs or electronic data that is a part of the computer system.

·         (was “the named insured’s” in the 08 07 edition) Damage the named insured’s services or products by contaminating or polluting them or in some other way causing them to become less than acceptable.

·         Any of the following that would be used, released, or given to others :

o    Confidential or proprietary information that belongs to the named insured

o    Confidential or personal information that belongs to a person or organization that is not the named insured

o    Weaknesses in the source code within any computer system. (The 08 13 edition replaces the words “the named insured’s” with “any “before the words “computer system.”)

e. Loss that results from title or possession of property being voluntarily given away

E. Definitions

These three definitions are added to F. Definitions in the Coverage Form or Policy.

1. Burglary means taking property from inside a locked safe deposit box in a locked vault inside the depository’s premises. This must be done by a person who unlawfully enters the box and vault. There must be visible marks of forced entry on the outside of the box and the vault as evidence of the unlawful entrance.

2. Depository is limited to only depositories listed on the endorsement schedule.

These depositories are the only locations where coverage applies, even if the named insured has other safe deposit boxes at other depositories during the policy term.

 

Example: Karina and Karina are not happy with Acme Bank, the depository listed on CR 04 09’s schedule. They transfer all of their accounts and also remove everything from their Acme safe deposit box on May 1. They take everything they removed to Union Savings and place them in a safe deposit box there. Union Savings is broken into on May 5 and the burglars remove everything in their safe deposit box. This loss is not covered because Karina and Karina did not update the depository information on the endorsement schedule.

 

3. Depository premises are the interior spaces of the depository location. If the depository is in a multi-tenant building, this means coverage ends when items leave the depository premises and enter a common building area, such as a hallway or staircase.

 

Example: Securities in Karina and Karina’s safe deposit box are removed and taken to the brokerage house located in the office suite next to the depository. A thief snatches the messenger’s briefcase as he walks out of the depository premises. CR 04 09 does not cover this loss because the theft occurred outside the depository premises, even though it was in an interior hallway of the same building.